Thailand's headline consumer price index (CPI) rose 1.95% in July from a year earlier, following a 2.42% annual increase in the previous month, the Ministry of Commerce reported on Wednesday.
The reading compared with a forecast rise of 2.55% in a Reuters poll and was inside the Bank of Thailand's (BoT) target inflation range of 1% to 3%.
The drop in the index was attributed to a decrease in oil prices, Nantapong Chiralerspong, head of the ministry's Trade Policy and Strategy Office (TPSO), told a briefing.
The probability of stagflation is low and is on a downward trend, Mr Nantapong added.
The core CPI, which excludes volatile energy and fresh food prices, rose 1.34% in July compared to a year earlier.
The headline consumer price index is expected to rise in August, the ministry said.
Headline inflation is forecast to reach 2.09% in the third-quarter, Mr Nantapong said. It stood at 1.21% in the January-July period.
The ministry maintained its full-year inflation forecast of 1.5% to 2.5% this year.
In June, the BoT left its key interest rate unchanged at 1.00% and raised its 2026 economic growth forecast to 2.3%.
The central bank's next monetary policy review is on Aug 26.
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